Labour MPs want a cap on political donations to stave off Nigel Farage’s big-money backers. Andy Burnham is set to disappoint them.

Downing Street will not include a universal domestic cap on political donations in Britain when the elections bill returns on Sept. 2, two officials briefed on government thinking said. But both the officials, who were granted anonymity to discuss policy considerations, did not rule out returning to the issue again in the future.

“We’re prioritizing cracking down on foreign interference and crypto billionaires as part of this piece of legislation,” one of the officials said, referencing existing proposals in the elections bill from Burnham’s predecessor Keir Starmer to cap overseas donors and ban cryptocurrency donations.

That’s despite mounting pressure to act from the British PM’s own MPs as they fret about Farage, whose rise has been aided by a flurry of cash from individual donors — and hints from Burnham himself that he is minded to move ahead. 

There is currently no limit on the amount individual donors based in the U.K. can give to a political party. Donations above £11,180 must be reported to the Electoral Commission watchdog. 

Burnham told transparency campaigners before becoming prime minister that he supported a cap to “guard against the perception of any one party being unduly influenced or swayed by one person or organisation.” 

While indicating a wider review of political funding would be required before setting a firm figure, Burnham said his “gut feeling would suggest somewhere in the region of £500k” for the upper limit. 

Following Burnham’s arrival in No. 10 Downing Street in July, officials in Whitehall had been waiting for a signal that they should start work to include a donation cap in the Representation of the People Bill — the official title of the elections bill.

But the two officials quoted above said using that bill as the vehicle for a cap could delay plans also included in the legislation to give 16-year-olds the right to vote at the next general election. 

A third British official acknowledged the Sept. 2 date, when the elections bill returns, is a “crunch point,” and suggested ministers could “kick the can” and commit to considering action when the bill gets to the House of Lords.

A Labour MP pushing for a donations cap said the arguments being put forward for not going ahead with a donations cap are “bullshit,” adding: “They are scared of the unions.”

Complicated landscape

A POLITICO analysis of how a £500,000 donation cap would have hit the main political parties’ finances over the last three years demonstrates the trade-offs Burnham would face in pushing ahead.

The analysis draws on publicly-available Electoral Commission returns for Westminster’s main political parties between Jan. 1 2023 and Dec. 31, 2025.

It shows a £500,000 ceiling would have curbed 55 percent of Reform UK’s reported private donations over the past three years — amounting to some £12 million — suggesting Nigel Farage’s party would have taken the greatest hit of any of the parties in proportional terms over the period.

But the data also shows there is potential peril for Labour in slamming a lid on funding — particularly if cash from trade unions, which represent some of the party’s major backers, is included.

A £500,000 cap over the same period — with no union exclusion — would have wiped out 47.4 percent of all private donations to Labour, or around £34 million in funding. 

An exemption from the cap for unions would leave Labour’s war chest significantly stronger. Labour would have kept hold of £12 million of that money over the same period, which included the donation-rich run-up to the 2024 general election.

The GMB trade union has already urged Labour MPs not to back a cap due to concerns it will damage the labor movement’s historic relationship with the party. 

Parliamentary pressure

Opting for a cap with or without a union exemption carries significant political risk for Burnham. Capping unions alongside individual donors and corporates would dent Labour’s finances and strain relations with the movement seen as foundational to the party’s identity. 

But exempting them from any cap would bolster Farage’s narrative that changes to election rules are part of an intentional establishment campaign to halt his party’s progress.  

Burnham’s predecessor, Starmer, already proposed an annual £100,000 cap on donations from British citizens living overseas.

The measure could create a major hurdle for crypto-entrepreneur Christopher Harborne, who has donated over £12 million to Reform UK despite being based in Thailand.

But MPs are already putting pressure on Burnham’s new government to go further.

Several amendments pushing for domestic caps set at various amounts — up to £1 million — were proposed when the bill was introduced earlier this year. A proposal from Labour MP Stella Creasy, which would mirror the £100,000 cap on overseas donors, gained the most support.

At the time, the amendments were aimed at demonstrating political appetite for a long-running campaign to limit the sway of mega-donors, but MPs and campaigners had hoped Burnham’s previous comments had indicated he was gearing up to act.

One adviser working the parliamentary push for a donations cap said MPs could back down if the government suggests its own cap — regardless of the size of it.

“Our preferred outcome is the government come forward with their own individual donation cap,” the adviser said. “Whatever the level is we will support it.” 

Supporters of a cap also pointed to Creasy’s amendment, drafted with assistance from Transparency International UK, as a potential middle-ground for the knotty union problem. Rather than a blanket policy, Creasy proposes that affiliation fees — an annual political levy usually paid by unions on a per-member basis — would be exempt from the cap, while other donations would be included.

POLITICO’s analysis shows that approach would lessen the blow on Labour’s finances — while not providing unions a complete carve-out.

In 2024, GMB gave Labour £2 million in total — of which £1.1 million was affiliation fees.

Under Creasy’s carve-out for unions, the £1.1 million in affiliation fees would go directly to Labour.

Only the remaining £900,000 would be subject to the cap, wherever it is set — meaning a far gentler loss to Labour.

“The loophole must be closed to prevent mega-rich donors who have the potential to harm democracy — as the government has accepted is possible — that means they can continue to donate just because they claim a U.K. postcode,” Creasy said.

POLITICO’s analysis suggests that the Creasy amendment’s proposed cap — £100,000 — would have eaten into the donation income of leading parties had it been applied over the last three years.

In 2023, a £100,000 cap would have deprived the then-governing Conservative Party of more than £26 million — around 54 percent of all its declared donations.

Labour would have lost between £11 million and £16 million, depending on how the rules were applied to unions — a loss of between 50 percent and 70 percent of its declared donations.

In 2024, both Labour and Conservatives would have lost higher sums of cash as election campaign fundraising hit its peak, although the losses remain similar in percentage terms.

Other parties would have faced similar hits, with the Liberal Democrats losing around 20 percent of their £9 million declared donation income, while around 40 percent of Reform UK’s £3 million of declared funds would have been ineligible.

Analysis of last year’s data suggests a £100,000 cap would have been devastating for Farage’s outfit given its reliance on mega-donors.

Of the £18.8 million declared in donations for 2025, more than £15 million would be lost under Creasy’s plan — around 80 percent of Reform’s total declared donations.

With campaign spending hitting record highs at the 2024 election, even a lenient cap would have had a substantial impact on the country’s major political parties. But successive polls have found public support for the measures.

In January, YouGov’s biannual tracker showed that 67 percent of Brits backed a donations cap of £50,000 or less, with support for the current, unlimited system dropping from 21 percent in 2020 to just 13 percent at the start of this year.

LONDON — Nigel Farage billed it as a “people vs the establishment” by-election. But before he wins back the seat he resigned in July, there’s the small matter of convincing Clacton’s voters he can help them with their shabby beachfront stairs.

POLITICO analysis of the Reform UK leader’s digital campaign messages shows that Farage has run a twin-track strategy in the seaside seat as polls open Thursday. The two key themes of the digital air war have been painting Farage as a champion for local residents — as well as an insurgent leader harried by the “establishment” machine.

Farage and his party have spent more than £10,000 pushing those messages via ads on Meta’s platforms — which include Facebook and Instagram — in the campaign so far.

It’s a similar amount to that spent by the party in the crunch Makerfield by-election in June, where Reform unsuccessfully attempted to halt Andy Burnham’s march on Downing Street by denying the Labour candidate a Westminster seat.

But in Clacton, Farage’s chief opponent is Count Binface, a satirical candidate who sports a silver cape, wears a rubbish receptacle on his head, and claims to be from outer space.

The Reform leader triggered the special election in a bid to bolster his personal standing amid questions about his finances, including whether he broke parliamentary rules by not declaring a £5 million donation from a crypto-entrepreneur. Britain’s other mainstream parties refused to field candidates in the contest as a result, leaving Farage running against independents and comedy characters.

In his paid ad content, the Reform leader makes no mention of his Count Binface, whose policies include capping the price of ice cream and holding a referendum on returning Pluto’s planetary status.

Instead, a spate of campaign videos have been pushed out showing Farage as having his finger on the pulse of local concerns.

Tackling low-level crime, housing problems, shabby infrastructure and veterans’ issues all get mentions in the paid ads targeted specifically at users living in the area.

One Meta ad suggests he is the only candidate to have visited forgotten areas of the constituency. A further clip shows a local resident giving Farage a positive review of his work — and is presented as proof that opposition complaints he has neglected the patch since his 2024 general election victory in the seat are “cobblers.”

With over 7 million followers across the leading social media platforms — making him by far the most-followed U.K. party leader — Farage has also been churning out election content across TikTok, Instagram and X.

Even with that reach, the Reform UK leader appears to be the only candidate running in Clacton who has used paid Meta features to bolster his online campaign.

Almost £1,000 has been spent on videos of Farage urging local supporters to request the party deliver and install an “I’m with Nigel” garden sign. Meanwhile, around £500 went to ads asking voters to return their postal votes and “send a message to the establishment.”

The largest single sum — between £4,000-£4,500 — was spent on an almost five-minute campaign video in which Farage waxes lyrical about the connection he’s made with local constituents, while claiming his party’s surging success has resulted in the powers-that-be using “foul means” to hamper him.

“Rather than being judged by the political class and the mainstream media, I am going to let you, the voters in the Clacton constituency, make a decision,” he said. “I want you to be my judge, not the political elite.”

Farage also used the same piece of campaign content to try and take on questions about his funding head-on. In the clip, the Reform leader argued that the furor over a £5m donation he received from crypto-entrepreneur Christopher Harborne before the 2024 election — now the subject of a House of Commons investigation — amounts to merely a failure to fill out a parliamentary form.

The Clacton candidate also argues in the same clip that the murder of a senior Reform figure proves such funding is needed for his personal security. “Surely in the wake of the death of the elderly Ann Widdecombe, you can see that I am going to need money to protect myself for the rest of my life,” he said.

With a result due in the early hours of Friday, Farage does not have long to wait to find out whether his online spend has paid off.